SpendSmart Shutters Prepaid Business, Shifts Focus to Mobile Loyalty Marketing (Dec. 4, 2014)
SpendSmart Networks is pulling the plug on its prepaid card business, citing poor performance amid increasing regulatory pressure and associated costs. The company, formerly known as BillMyParents, initially focused on the teen segment and announced a greater push into prepaid with government programs last fall. SpendSmart’s October 2013 acquisition of SMS Masterminds, a provider of SMS-based mobile loyalty solutions, is proving more fruitful and will be the company’s focus moving forward, according to an announcement.
SpendSmart has nearly 2 million subscribers for its mobile loyalty marketing business, which increased revenue 153 percent year-over-year in the third quarter. SpendSmart CEO Alex Minicucci said the company has substantial opportunity and demand for its service-based licensee model throughout North America. And in September, SpendSmart announced the acquisition of TechXpress Inc.’s e-commerce solutions division, which provides personalized Website, e-commerce and mobile app development services, as well as Web marketing tools and analytics.
All prepaid card-related operations are planned to end on or about Jan. 26, 2015. Following the transition, the company expects to realize annualized net savings of approximately $2.1 million.
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